The plant, due to be operational in early 2016, will produce Oreo, Tuc, Ritz, Barny, belVita and Prince biscuits for Middle East and Africa.
‘Investment friendly country’
“We already have a plant here and we have good experience here, “ James Cordahi, director of corporate & government affairs, Middle East & Africa at Mondelēz told ConfectioneryNews.
“It’s a business and investment friendly country. If you want to supply the region it is a good place to do it from.”
The new plant will be located on the Bahrain International Investment Park on the outskirts of the capital Manama and will employ 300 people. It will be within the same park as Mondelēz’s current Bahraini facility, but will be separated by around 3km.
Mondelez’s existing plant produces Kraft cheese and Tang powdered beverages for Gulf Arabic markets.
“The new one will have a much larger remit,” said Cordahi.
Reached capacity at Saudi plant
The new plant will supply the whole of Middle East and Africa. The region is currently supplied from Mondelēz’s plant in Eastern Saudi Arabia, which it acquired from Nabisco in 2003.
“It’s essentially reached maximum capacity and the land is maxed out,” said Cordahi.
He said that the new plant would cater for heightened demand for biscuits in the region.
“Demand for biscuits has grown in double digits. The view is that that growth will continue. Clearly with the investment we feel confident in growth.”
Stability in the region
Bahrain experienced political unrest and protests in 2011 during the Arab Spring by the majority Shia population. Cordahi said that the country was now stable and even at the height of the Arab Spring, Mondelēz never lost a day of production at the existing Bahraini plant.
He said that Mondelēz would target the wealthier markets of the Gulf Cooperation Council such as Saudi Arabia and added that Egypt’s economy was expected to pick up.
In the initial two- to three-year phase, the new plant will operate four biscuit-manufacturing lines with an annual capacity of around 90,000 metric tons.
The move is part of a wider supply-chain reinvention plan that Mondelēz says will deliver $3bn in gross-productivity savings, $1.5 billion in net savings and $1 billion in incremental cash over the next three years.